Antitrust vs. Industrial Policy
Both anti-trust policy and industrial regulations deal with monopoly. What distinguishes the two approaches? How does government decide to use one form of remedy rather than the other?
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Antitrust policy is one of the ways to counter the loss of efficiency in a monopolistic market structure. Antitrust policy attempts to make companies act in a competitive manner by breaking up companies that are monopolies, prohibiting mergers that would increase market power, and finding and fining companies that collude to establish higher prices. The economic case for antitrust policy is based on efficiency. Monopoly can lead to an inefficient use of resources when compared to the competitive ...
Solution Summary
The solution distinguishes between antitrust and industrial approaches.